Summaries of health policy coverage from major news organizations

Sen. Deborah Ortiz (D-Sacramento) on Tuesday sent a letter to the Department of Managed Health Care asking it to examine a decision last week by CalPERS to drop 38 of the most costly hospitals from its Blue Shield of California HMO network beginning in 2005, the Sacramento Beereports (Chan, Sacramento Bee, 5/26). Officials for CalPERS, the third-largest purchaser of health care in the nation, voted last week to drop the hospitals in an effort to control premium rate increases, which have increased 57% since 2002. Blue Shield indicated that some of the hospitals being dropped had proposed rates for 2005 that exceeded the statewide average by as much as 80%. The move is expected to save CalPERS $36 million in 2005 and $50 million annually after that. Some 53,000 CalPERS members statewide will be affected by the decision. Sutter Health, Sharp HealthCare, Catholic Healthcare West and Tenet Healthcare are among the hospital systems whose facilities will be dropped from the CalPERS Blue Shield HMO network. Members whose providers are dropped but who wish to keep their physicians or hospitals will be able to enroll in one of two preferred provider plans offered by CalPERS (California Healthline, 5/20).

Sacramento Region Affected Most

According to the Bee, four of the 13 Sutter hospitals that are scheduled to be dropped are in the Sacramento region, and the move could force as many as 33,000 local patients who currently are Blue Shield HMO members to find new doctors and hospitals. In her letter, Ortiz questioned whether the Sacramento-area health care system could absorb all of the affected Blue Shield members. She said, "We don't know where the people will go. CalPERS did not demonstrate that we can adequately absorb these (members) in the other health plans." Pat Macht, a spokesperson for CalPERS, said the organization is working with Ortiz's office to answer her questions, adding that an analysis by Blue Shield indicated that the Sacramento area has an adequate number of physicians and hospitals to handle the influx. "No member will be left out in the cold," she said (Sacramento Bee, 5/26). Officials for CalPERS said it is unlikely that all 38 hospitals voted out of the network will be dropped in the end, depending on how many decide to continue negotiations to lower prices. CalPERS is scheduled to make final decisions on benefits and rates for 2005 in mid-June. DMHC must approve all changes (California Healthline, 5/20).

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